India Cements’ Managing Director fights back against builders

India Cements Ltd has reported a net loss of Rs.2.96 crore for the June quarter (1Q15), marking its third consecutive quarter of loss. In the same quarter last year, the company achieved a net profit of Rs.18.62 crore. Analysts had expected India Cements to return to profit. Compared to the last quarter of the previous financial year, 1Q15 shows some improvement.

Net sales were down and prices slumped during April and May, but improved last month, according to reports. Freight costs also played a part in the deficit.

N Srinivasan, Vice Chairman and Managing Director was quoted in various news reports yesterday rebutting the criticism levelled at the cement industry by builders and property developers, who have accused the industry of over-pricing cement. Mr Srinivasan reportedly said that the cost of cement was a fraction of the total building cost, asking “When builders are selling at such high costs, how does the increase in cement matter to them?” He added that builders do not pay the full rate for a bag of cement, generally negotiating a discount with suppliers. Mr Srinivasan said: “We are not finding fault with builders. Everybody has their own business model…But why are they coming into mine?”